Company Management Ppt 22237
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Company Management
Subjects to be covered
BOARD OF DIRECTORS
MANAGING DIRECTOR
AUDITORS
COMPANY SECRETARY
Board of Directors
Definition: “any person occupying the position of a director by whatever name called.” u/s 2(13)
Only individuals to be directors
Legal position of directors
u/s 253
Appointment Appointment of First directors u/s254 Appointment at General Meeting u/s255 Appointment by Third Parties Appointment by Central government
1. 2. 3. 4.
us/408
Appointment by the Board:
5.
As an additional director To fill a casual vacancy As an alternate director
u/s 260 u/s 262 u/s 313
DIRECTORS:
Minimum number of directors Maximum number of directors Increase or decrease in number Number of directorships
RIGHTS:
Attend the meetings
Participate in the management To receive remuneration
Duties General duties: Duty of good faith Duty of care Duty not to delegate
Statutory Duties: Not to issue irredeemable preference shares redeemable after 10 years Disclose interest Attend Board Meetings Convene General Meetings Prepare report
Powers
General powers of board
Exercised only at Board Meetings
Requiring consent of Central Government
Requiring unanimous voting
Restrictions on powers
Remuneration: Director: 1% of Net Profits 3% of Net Profits if no MD
Managing Director: 5% of Net Profits 10% in case of 2 MDs
* Maximum remuneration should not exceed 11% of Net Profit
End to Directorship
Disqualification Removal Retirement Vacation from office Resignation
Removal
Removal by shareholders Removal by central government Removal by law board
MANAGING DIRECTOR OR WHOLETIME DIRECTOR u/s 2(26) Definition: Managing Director means a director who by virtue of an agreement with the company , or of a resolution ed by the company in general meeting or by its Board of Directors , or by the virtue of its memorandum or articles of association , is entrusted with substantial powers of management which would not otherwise be exercisable by him.
A managing director may be appointed in any of the following ways :
by agreement with the company; by a resolution ed by the company in general meeting; by a resolution ed by the Board of Directors; by memorandum of associations; by articles of association.
Appointment of managing director or wholeu/s 269, 268 & 317 time director:
On and from 5.06.1988, every public company, or a private company which is a subsidiary of a public company, having paid-up share capital of rupees five crores or more, shall have a managing or whole-time director. No appointment of a person as a managing or whole-time director in a public company or a private company which is a subsidiary of a public company shall be made except with the approval of the Central Government unless such appointment is made in accordance with the conditions specified in Parts 1 & 2 (subject to provision of Part 3) of Schedule 13 & a return in the prescribed form is filled within ninety days from the date of such appointment. Every application seeking approval to the appointment of a managing or whole-time director or a manager shall be made to the Central Government within a period of ninety days from the date of such appointment. Company Law Board.
Appointment Number of companies in which one person may be appointed managing director: u/s 316
A person can be appointed as a managing director or manager of one or more company in the following cases: • such appointment or employment is approved by a resolution ed at a meeting of the Board with the consent of all the directors present at the meeting; • specific notice of a meeting and resolution to be moved thereat regarding the appointment of a managing director of more than one company has been given to all the directors then in India. • The Central Government may, by order, permit any person to be appointed as a managing director of more than two companies, if the Central Government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common managing director.
Powers of managing director or whole-time director:
power to affix the common seal of the company to any document; or to draw and endorse any cheque on the of the company in any bank; or to draw and endorse any negotiable instrument; or to sign any certificate of share; or to direct registration of transfer of any share.
Disqualification of a managing director u/s 267
No company shall appoint or employ or continue the appointment of any person as a managing or whole-time director who: • is an undischarged insolvent, or has at any time been adjudged an insolent; • suspends or has at any time suspended payment to his creditors, or makes, or has at any time made a composition with them; or • is or has at any time been convicted by Court of an offence involving moral turpitude.
Auditors Who are auditors Types of auditors Qualifications of auditors – (S- 226)
Appointment of auditors
1st Auditor
u/s 224(5)
Subsequent auditors
u/s 223(1)
Through special resolution
Who can not be appointed as auditors
A body corporate An officer or employee of the company A person who is the partner of the company A person who is in debt to the copmay exceeding to Rs. 1000/- or who has given guarantee or provided any security
Removal of auditors
By ing a resolution in General meeting
Rights of auditors
To call for information & explanation To access books of s To attend meetings and to receive notices Inspection of articles other than books of s
Duties of auditors
To scrutinize
Loans & advances Entries Investment Expenses
Company Secretary
Definition – “Secretary means a company secretary within the meaning of clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 and includes any other individual possessing the prescribed qualifications and appointed to perform the duties which may be performed by a secretary under this Act and any other ministerial or istrative duties.”
Qualifications
Statutory Qualifications Under two categories : Companies having a paid-up share capital of Rs. 2 crores or more For other companies
Qualifications Contd…
Other qualifications :
Sound general education Proficiency in language Wide knowledge Knowledge of company law Knowledge of other laws Knowledge of office organization and methods Knowledge of economics, banking and finance Good personality
Appointment of company secretary
Compulsory appointment of a company secretary u/s 383A Engaging Company Secretary in wholetime practice by Companies Act 2000. What is the procedure of appointment?
Position of Company Secretary
Recognized as a responsible officer of the company under rule 2(b) of the Company Rules. Carries out the policy decisions of Board but for routine day-to-day affairs, the secretary has the authority to carry out the work. Acts as a link between the company and the outside world. Enjoys a unique position in the management but does not have managerial powers.
Duties of Secretary
General Duties Statutory Duties Duties under Income-tax Act Under the Indian Stamp Act Under other acts
Rights of company secretary
Right to control and supervise the working of his department. Right to sign a document or proceeding. Right to be indemnified by the company for any loss suffered by him. Right to receive remuneration.
Dismissal of a company secretary
May be removed from his office by a resolution of Board of Directors. Can be dismissed without giving him a notice in the following cases –
For willful disobedience For misconduct or moral turpitude For negligence For incompetence or permanent disability
THANK YOU
Subjects to be covered
BOARD OF DIRECTORS
MANAGING DIRECTOR
AUDITORS
COMPANY SECRETARY
Board of Directors
Definition: “any person occupying the position of a director by whatever name called.” u/s 2(13)
Only individuals to be directors
Legal position of directors
u/s 253
Appointment Appointment of First directors u/s254 Appointment at General Meeting u/s255 Appointment by Third Parties Appointment by Central government
1. 2. 3. 4.
us/408
Appointment by the Board:
5.
As an additional director To fill a casual vacancy As an alternate director
u/s 260 u/s 262 u/s 313
DIRECTORS:
Minimum number of directors Maximum number of directors Increase or decrease in number Number of directorships
RIGHTS:
Attend the meetings
Participate in the management To receive remuneration
Duties General duties: Duty of good faith Duty of care Duty not to delegate
Statutory Duties: Not to issue irredeemable preference shares redeemable after 10 years Disclose interest Attend Board Meetings Convene General Meetings Prepare report
Powers
General powers of board
Exercised only at Board Meetings
Requiring consent of Central Government
Requiring unanimous voting
Restrictions on powers
Remuneration: Director: 1% of Net Profits 3% of Net Profits if no MD
Managing Director: 5% of Net Profits 10% in case of 2 MDs
* Maximum remuneration should not exceed 11% of Net Profit
End to Directorship
Disqualification Removal Retirement Vacation from office Resignation
Removal
Removal by shareholders Removal by central government Removal by law board
MANAGING DIRECTOR OR WHOLETIME DIRECTOR u/s 2(26) Definition: Managing Director means a director who by virtue of an agreement with the company , or of a resolution ed by the company in general meeting or by its Board of Directors , or by the virtue of its memorandum or articles of association , is entrusted with substantial powers of management which would not otherwise be exercisable by him.
A managing director may be appointed in any of the following ways :
by agreement with the company; by a resolution ed by the company in general meeting; by a resolution ed by the Board of Directors; by memorandum of associations; by articles of association.
Appointment of managing director or wholeu/s 269, 268 & 317 time director:
On and from 5.06.1988, every public company, or a private company which is a subsidiary of a public company, having paid-up share capital of rupees five crores or more, shall have a managing or whole-time director. No appointment of a person as a managing or whole-time director in a public company or a private company which is a subsidiary of a public company shall be made except with the approval of the Central Government unless such appointment is made in accordance with the conditions specified in Parts 1 & 2 (subject to provision of Part 3) of Schedule 13 & a return in the prescribed form is filled within ninety days from the date of such appointment. Every application seeking approval to the appointment of a managing or whole-time director or a manager shall be made to the Central Government within a period of ninety days from the date of such appointment. Company Law Board.
Appointment Number of companies in which one person may be appointed managing director: u/s 316
A person can be appointed as a managing director or manager of one or more company in the following cases: • such appointment or employment is approved by a resolution ed at a meeting of the Board with the consent of all the directors present at the meeting; • specific notice of a meeting and resolution to be moved thereat regarding the appointment of a managing director of more than one company has been given to all the directors then in India. • The Central Government may, by order, permit any person to be appointed as a managing director of more than two companies, if the Central Government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common managing director.
Powers of managing director or whole-time director:
power to affix the common seal of the company to any document; or to draw and endorse any cheque on the of the company in any bank; or to draw and endorse any negotiable instrument; or to sign any certificate of share; or to direct registration of transfer of any share.
Disqualification of a managing director u/s 267
No company shall appoint or employ or continue the appointment of any person as a managing or whole-time director who: • is an undischarged insolvent, or has at any time been adjudged an insolent; • suspends or has at any time suspended payment to his creditors, or makes, or has at any time made a composition with them; or • is or has at any time been convicted by Court of an offence involving moral turpitude.
Auditors Who are auditors Types of auditors Qualifications of auditors – (S- 226)
Appointment of auditors
1st Auditor
u/s 224(5)
Subsequent auditors
u/s 223(1)
Through special resolution
Who can not be appointed as auditors
A body corporate An officer or employee of the company A person who is the partner of the company A person who is in debt to the copmay exceeding to Rs. 1000/- or who has given guarantee or provided any security
Removal of auditors
By ing a resolution in General meeting
Rights of auditors
To call for information & explanation To access books of s To attend meetings and to receive notices Inspection of articles other than books of s
Duties of auditors
To scrutinize
Loans & advances Entries Investment Expenses
Company Secretary
Definition – “Secretary means a company secretary within the meaning of clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 and includes any other individual possessing the prescribed qualifications and appointed to perform the duties which may be performed by a secretary under this Act and any other ministerial or istrative duties.”
Qualifications
Statutory Qualifications Under two categories : Companies having a paid-up share capital of Rs. 2 crores or more For other companies
Qualifications Contd…
Other qualifications :
Sound general education Proficiency in language Wide knowledge Knowledge of company law Knowledge of other laws Knowledge of office organization and methods Knowledge of economics, banking and finance Good personality
Appointment of company secretary
Compulsory appointment of a company secretary u/s 383A Engaging Company Secretary in wholetime practice by Companies Act 2000. What is the procedure of appointment?
Position of Company Secretary
Recognized as a responsible officer of the company under rule 2(b) of the Company Rules. Carries out the policy decisions of Board but for routine day-to-day affairs, the secretary has the authority to carry out the work. Acts as a link between the company and the outside world. Enjoys a unique position in the management but does not have managerial powers.
Duties of Secretary
General Duties Statutory Duties Duties under Income-tax Act Under the Indian Stamp Act Under other acts
Rights of company secretary
Right to control and supervise the working of his department. Right to sign a document or proceeding. Right to be indemnified by the company for any loss suffered by him. Right to receive remuneration.
Dismissal of a company secretary
May be removed from his office by a resolution of Board of Directors. Can be dismissed without giving him a notice in the following cases –
For willful disobedience For misconduct or moral turpitude For negligence For incompetence or permanent disability
THANK YOU
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